iPad and Other Tablets May Boost Mobile Banking

You've heard the hype about the iPad and seen the photos of excited people waving their new purchases.

While Apple has captured the headlines, there's actually a stream of tablet computers entering the market from the likes of Dell and Gateway as well as lesser-known labels like DRS Tactical and LXE.

The devices are being positioned as something between a smart phone and a laptop. The question for credit unions is, if these devices catch on, will members be using them for mobile banking, boosting the ranks of those who rely on an electronic link to their accounts?

"Absolutely," said Victor Smilgys, a mobile banking security expert and executive vice president of ecommerce at Technology Credit Union in San Jose, Calif. "When we announced last year we had launched an iPhone application for our website, we saw a tremendous volume in mobile banking. The majority are iPhone users. So we know our members are using these devices. I anticipate iPhone users will also be iPad users. Prior to the iPhone application, mobile banking was pretty steady. Since then it has definitely been rising."

Although Tech CU's iPhone app is not really for mobile banking, Smilgys said members can use their iPhones or iPads to access the credit union's browser-based mobile banking.

The situation is similar for most credit unions and members, he added. But when it comes to security, "consumers should be cautious."

The good news is that online banking information is encrypted. However, because mobile devices are easier to lose than a desktop tethered in an office or home, it's especially important to protect them with a password. That way, if they do get into the wrong hands, the thief can't open any applications.

Smilgys said Tech CU is looking into creating an application more tailored to these new devices, and safety is a top priority.

"It's a race to get the latest and greatest out there, but we need to make sure we have a special concern for security," he said.

Although Apple has a stringent approval process for applications, members should still be cautious about downloading new apps and should verify that they are legitimate.

The best defense against hackers and fraud is education, Smilgys said. Members should be encouraged to use mobile banking safely by taking basic precautions such as password protection, deleting old text messages, not disclosing personal information in a text message and monitoring financial accounts.